ARIZONA, USA — Buyers of new cars are paying more now than they ever have, and the prices aren't expected to drop anytime soon.
The average price of a new car hit an all-time high of $45,031 in September, a report from Kelley Blue Book found. That price is a 12% increase from 2020.
"As long as the demand keeps going, the prices are going to stay up there," Dave Martin with Martin's Auto Repair in Phoenix said. "You are going to pay top dollar for a vehicle right now. If you don't need a vehicle right at this time, it's probably best to hold off for a little while."
The current outlook for 2022 doesn't expect a price decrease.
Another report from IHS Markit found that people are also keeping their used cars for 12.1 years, much longer than in years past. People who have sold their vehicles recently have been met with the high prices of the current market.
"With the chip shortage that started this whole thing, new vehicles are really hard to find and used vehicles are at an all-time high," Martin said. "The pent-up demand for vehicles right now is what's driving [the price increase]."
Another contributing factor is the work-from-home movement that was forced into place by the COVID-19 pandemic. It's no surprise that the same IHS Markit report found a 13% reduction in miles traveled between 2019 and 2020.
"The increase in average age will further drive vehicle maintenance opportunities from an increasingly aged vehicle fleet," the report said.
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